Sugar Falls As Cane Crush Season Speeds Up

By Julie Wernau Features Dow Jones Newswires

Sugar prices were on track to fall for a third straight session

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Thursday as traders awaited news out of Brazil regarding the pace of

sugar production.

Raw sugar for July lost 0.9% to 15.53 cents a pound on the ICE Futures

U.S. exchange.

Brazil, the largest producer of sugar, had a disappointing start to

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its crushing season in April, due to excessively wet conditions. But

analysts surveyed by S&P Global Platts are now expecting the pace of

sugar production to speed up.

Analysts say they expect 36.15 million tons of sugarcane to be crushed

in the largest growing region of Brazil, a 9% drop over the same

period last year but a 50% increase from the second half of April.

Meanwhile, concerns about demand for sugar are weighing on prices,

says Commerzbank. Analysts at Platts Kingsman have said they expect

this year to see the lowest global sugar demand growth in a seven

years.

"Widespread political efforts to encourage people to adopt a low-sugar

diet -- through compulsory labeling and sugar taxes -- appear to be

dampening the demand outlook," Commerzbank noted.

News that OPEC members would renew an agreement to cut crude production through March 2018, helped to stem losses. A positive turn for ethanol prices,

traders said, could encourage sugar producers to convert a larger

percentage of cane to ethanol. At the moment, analysts are expecting

about 45.87% of cane to be used to produce sugar, up from 42.9% a year

earlier.

In other markets, cocoa for July was off 0.3% at $1,889 a ton, July

arabica coffee fell 0.7% to $1.277 a pound, frozen concentrated orange

juice for July lost 0.3% to $1.355 a pound and July cotton fell 0.3%

to 77.30 cents a pound.

Write to Julie Wernau at julie.wernau@wsj.com

(MORE TO FOLLOW) Dow Jones Newswires

May 25, 2017 11:25 ET (15:25 GMT)